Key Takeaways
A trio of new tokens on Ethereum, including one that appreciated 60-fold in six days, are using a novel Uniswap V4 feature called 'hooks' to create new on-chain economies and drive millions in trading volume.
The narrative gained significant traction after OpenSea CMO Adam Hollander expressed interest in uPEG, one of the new tokens, which subsequently appreciated threefold, according to a report by industry observers Jaleel and Cookie. The project's virality was fueled by a backstory combining Uniswap history, a quip from Ethereum co-founder Vitalik Buterin, and NFT slang.
Data from the tracking site CoinGecko shows the uPEG token reached a price of $982 and a market capitalization of $34.44 million in two weeks. Another project, the generative art collection Slonks, saw its mint price rise from under 0.004 ETH to 0.123 ETH in six days. SATO, an earlier hook-based token, saw its market cap grow from under $3 million to $40 million.
This trend demonstrates a new design space for developers on Ethereum, moving beyond simple token swaps to more complex, programmable assets. The next phase may involve "meta-hooks" that combine multiple functions, and the growth of Unichain, a planned Uniswap-centric blockchain, as a specialized environment for these projects.
Uniswap V4 hooks, which entered the public consciousness in recent weeks, allow developers to insert custom code that runs at different points in a token swap's lifecycle. This enables mechanics that were not previously possible inside a liquidity pool, such as dynamic fees, on-chain limit orders, or, in these new cases, complex tokenomic models.
The first of the recent wave, SATO, launched in mid-April and proved that a bonding curve economic model could be executed entirely on-chain via a hook. It attracted a niche community of DeFi veterans before the narrative became mainstream.
The breakout project was uPEG, which launched in late April. Its name, a portmanteau of Uni and JPEG, references a name Uniswap founder Hayden Adams considered for the protocol. The story, combined with endorsements from figures like Hollander, caused its holder count to jump from 200 to over 4,000 in 24 hours, according to on-chain data.
Following this, Slonks launched on May 1. It placed a 214KB AI image model into an Ethereum smart contract to generate "distorted" versions of CryptoPunks, with the level of distortion, or "slop," being a tradable attribute. On May 8, its single-day trading volume of 575 ETH surpassed the 129 ETH for the original CryptoPunks, according to OpenSea data. The project's success has further solidified the V4 hook narrative, showing the potential for more complex, game-like mechanics to be built directly into financial primitives.
This article is for informational purposes only and does not constitute investment advice.
